The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

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HALIFAX, WEDNESDAY, NOVEMBER 6, 2002

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. William Estabrooks

VICE-CHAIRMAN

Mr. James DeWolfe

MR. CHAIRMAN: I would like to welcome you to this session of our Public Accounts Committee this morning. Before I begin our usual introductions and, of course, our witnesses, when they have the opportunity to introduce themselves, I want to draw the attention of the MLAs on the floor to a special guest we have here with us today. I want to take this special opportunity this morning to introduce to the committee and the public who are in the gallery this distinguished visitor. With us today we have Ben Morash. Ben is a Grade 9 student at Astral Drive Junior High, and he is the son of our Assistant Auditor General, Elaine. Ben and Elaine are participating in the Grade 9 Take Our Kids to Work Day. Ben, I would like to welcome you here this morning. You will have evidence of the fact of how important your mother is in this process and how often we depend upon her. Ben, could you stand and receive our greeting. (Applause)

Our witnesses have received the opening statement, which we usually make available to witnesses. Before we ask them to introduce themselves, however, I would ask my colleagues to introduce themselves beginning with my colleague, the member for Halifax Fairview.

[The committee members introduced themselves.]

MR. CHAIRMAN: I am Bill Estabrooks, the MLA for Timberlea-Prospect and I have the privilege of being the chairman of the Public Accounts Committee. Could our witnesses introduce themselves.

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DR. TOM WARD: Mr. Chairman, I am Dr. Tom Ward, Deputy Minister of Health.

MS. ELEANOR HUBBARD: I'm Eleanor Hubbard, the Director of Pharmaceutical Services for the Department of Health.

MR. CHAIRMAN: We welcome you here this morning. I want to remind our witnesses that I have a reputation, as I've been told, before we begin, of being a prompt school teacher. We did begin 34 seconds late this morning, I noticed that. Our opening statements are usually restricted in the range of 12 to 15 minutes, and I caution you to the fact that at that time I will be asking you to wrap up. It's 8:03 a.m., if you could begin, please.

DR. TOM WARD: Mr. Chairman, as a beginning, I would like to provide the committee with some background about the broader area of pharmaceuticals and some specific issues in Canada. Following that, Eleanor will provide you with an overview of the Pharmacare Program in Nova Scotia. We would be pleased to answer any questions following that.

As a department and as a physician who has been in practice for a number of years, or who was in practice, the department and myself are very clear, pharmaceuticals have a very important role to play in the management of many diseases. There are many challenges related to the use of drugs by individuals and within the general population. I think it's important to point out that the taking of pharmaceuticals is not normal. These are manufactured compounds that are not normally found, for the most part, in the human body. They are used to ameliorate disease, treat cancers and many other things.

The challenge for physicians and governments alike is to find the appropriate use for medications and to find cost-effective treatments for diseases. These decisions need to be made using the best evidence available. That evidence is hard to find. Historically, it has not been a level playing field. The goal of drug companies or the manufacturers and governments, quite frankly, are not congruent. Drug companies are in the business of making and selling drugs and, importantly, making a profit for their shareholders. Governments are seeking to provide the best value to the public for public funds. Drug companies will continue to develop and sell medications, hoping to expand their market share or to increase their customer base.

This year, in the British Medical Association Journal, a series of articles was run around the issue of pharmaceutical marketing practices and they are an extremely informative read. I would urge the members, if they have an opportunity, to go on to the BMJ Web site, it's bmj.com and look for the April 9, 2002 set of journals. It really talks about direct-to-consumer marketing, it talks about marketing programs by drug companies in which they help the public understand they may have an issue or a disease and in fact go out and significantly increase markets.

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I brought with me this morning a copy of the Canadian Medical Association Journal, which is sort of the common journal or one of the common journals that most practitioners read. At least 100 pages in this are paid drug advertising. There are a large number of very glossy rollouts. This is the kind of information that most practitioners are getting at the current time from drug companies. This is their evidence. Surprisingly or not surprisingly, this is not contrary, it does not show that the drugs don't work, it does not show that they're ineffective.

The challenge for a government and for a Pharmacare Program is really to figure out how to find that evidence and make some thoughtful decisions. The same information is provided to advocacy groups, disease-specific coalitions and to the general public. Drug companies don't go out and publish negative studies to say that they've tried their drug on something and it doesn't work. For the first time this year, leading medical journals around the world have agreed to publish major studies in which the results do not show significant change with the use of medications. For the first time. Prior to that time everything being published showed, for the most part, positive effects of medications. For the department, we have run a couple of programs, which we can speak to later, including academic detailing, which is really designed to assist practitioners in the ordering of medication.

The issue I raised earlier about the evidence issue remains a challenge but, nationally, we are moving ahead with an expanded national expert review process for medications that are currently being promoted for listing on government formularies. Nationally, prescription drug costs continue to rise every year, with further cost pressures being brought onto the system as manufacturers develop and try to market more medications. The annual cost of medications, nationally, within the health care system, is increasing approximately 20 per cent per year. It has a direct effect on hospital-based funding. It generally drives the cost by a minimum of 5 per cent per year. It is against this background that our Pharmacare Program provides appropriate medications to seniors using the best evidence. Eleanor, would you like to talk about the program?

MS. HUBBARD: Just as a follow-up to Dr. Ward, I want to give you some facts, as well, around drugs and the drug programs. Drugs, when used appropriately, have been proven to be a cost-effective way to prevent and treat disease. Drugs are not covered under the Canada Health Act, except when provided as part of a hospital stay. Drugs are the second-highest expenditure in the Canadian health care system. In 2001, approximately $15.5 billion was spent on pharmaceuticals in Canada, with approximately 49 per cent of these costs paid for by federal, provincial and territorial public drug plans.

Drug costs are growing at a rate of 12 per cent to 20 per cent per year, outpacing the growth of any other health care component. In Nova Scotia, funding for drugs is provided through a number of programs, including the Nova Scotia Seniors' Pharmacare Program; the Community Services Pharmacare Program; disease-state specific programs, including cystic fibrosis, cancer, growth hormone deficiency and diabetes insipidus. We also have hospital-

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based exception funding for HIV, multiple sclerosis and transplant drugs for all Nova Scotians, distributed through the hospitals for use in the community. We also provide funding for drugs for in-hospital.

The largest of these, and the reason we're here today is the Nova Scotia Seniors' Pharmacare Program. The Nova Scotia Seniors' Pharmacare Program is a provincial drug insurance program provided by the province to help seniors manage their drug costs in partnership with physicians and pharmacists. Participation in the program is optional. The program covers drugs, ostomy supplies and diabetic supplies, including testing materials, needles, syringes and insulin. Approximately 3,500 drugs are currently benefits under the Seniors' Pharmacare Program. Approximately 60 new drugs were reviewed in 2001-02, 80 per cent to 90 per cent were approved as benefits; 77 generic drugs were reviewed and 71 were listed as benefits under the Seniors' Pharmacare Program.

As mentioned earlier, the cost of drug programs is growing faster than any other health care component. We are seeing this across Canada and around the world. In Nova Scotia, when the Seniors' Pharmacare Program was introduced in 1974-75, the program cost was $7.2 million and the number of seniors it served at that time was 77,000. In 2001-02, the program cost $113 million with 93,600 seniors.

There are a number of program pressures contributing to the growth of drug programs in Nova Scotia and elsewhere. Newer drugs are coming on to the market, many of them are patented, most of them are very expensive. We see drugs now that cost in the range of $20,000 to $50,000, versus the thousands of dollars we saw even just five years ago. There is use of newer, more expensive drugs, over existing, less expensive therapies. Where at one time penicillin would have been used, a much more expensive antibiotic is now currently used to treat the same disease where penicillin will work just as well.

Our population is aging and therefore requiring more drugs. Drug utilization is increasing and as well, new technologies - bio-tech drugs and gene therapy - are contributing to the costs of the program. These are pressures we need to manage and we have put a number of strategies in place to do so, including pricing policies - we pay actual acquisition costs for drugs within our program. That means there's no mark-up to the pharmacies, we just pay the actual cost of the drug. We also pay for a less expensive generic when it is available and equivalent to a brand name product. We don't pay any extra for new drugs that have no additional benefit over existing drugs. We also have a formulary management committee, which is a committee of experts that review all of these new drugs and on that committee are practising general practitioners, specialists, as well as practising pharmacists, academics, economists and other expertise.

Our staff pharmacists do drug utilization reviews, they review patient charts or drug histories within our program and identify problems or issues and work with physicians and pharmacists to resolve these issues on behalf of seniors. We have a committee called the Drug

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Evaluation Alliance of Nova Scotia that identifies drug and health issues facing seniors, and work to improve drug therapy in concert with physicians and pharmacists. Some of the recent initiatives include topical steroids, getting doctors to move their patients from potent, strong corticosteroids to less potent, and that prevents damage to the thin, fragile skin of seniors.

We also did a wet nebulization program where, in concert with the doctors, moved patients from the mask therapy to the asthma puffers. This dry delivery system is more effective, there's less contamination and it's less costly. Now 92 per cent of our seniors are using this effective medication. Chlorpropamide, which is a drug used in diabetes, is not recommended in the elderly. An initiative was made to move 1,200 seniors from that medication to prevent increased seizure, myocardial infarction and death.

As well, in partnership with the Dalhousie University Continuing Medical Education, the department and the CME have implemented a province-wide academic detailing service. Academic detailing has proven to be one of the most effective methods of encouraging and maintaining appropriate prescribing, which helps both the seniors and the public in general.

It provides complete and objective drug information to physicians based on the best available evidence, not just what is seen in the glossy magazines that Dr. Ward showed you earlier.

[8:15 a.m.]

A health educator visits a physician in his or her office to provide a 15- to 20-minute educational intervention on a specific topic and this has been seen to be very effective; in particular, the drug industry themselves use it, so we've taken a lesson from them and it's working very well. One of the examples within that program was a campaign for influenza and pneumococcal vaccination, increasing the number of those vaccinations. After that initiative, the vaccinations increased significantly, especially in the high-risk groups under 65. Just for background, there are 21,000 physician visits for flu or flu-like conditions each year, over 2,500 hospitalizations and 450 deaths. There has also been a campaign to educate physicians on the management of osteoarthritis, which is a considerable issue in the elderly.

Also, to manage the rising costs of drugs, we are working with other organizations: the Seniors' Secretariat, we meet monthly with the Group of Nine; and the Atlantic Common Drug Review, we are working with the other Atlantic Provinces to pool our resources and reduce duplication to do expert reviews on new drugs coming on the market and that will move to a national common drug review with all provinces involved, later this year. We also work with the Patented Medicine Prices Review Board, which monitors the prices in relation to other countries for patented medicines. We work with the Canadian Institute for Health Information on a national drug utilization database and performance indicators. We are working to develop that so we have good information on which to base our decisions around utilization of drugs.

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MR. CHAIRMAN: Excuse me, Ms. Hubbard, I would like to encourage you to wrap up in about a minute, please.

MS. HUBBARD: Okay. So, with that, I think the point we are trying to make this morning around this is it is a very complicated program. The growth is significant in our program and in others and we are doing what we can to manage both the costs and ensure that appropriate therapy is provided to seniors of this province. Thank you.

MR. CHAIRMAN: Thank you. Before I turn the floor over to the MLA for Halifax Fairview, I wonder if you would allow on introduction, Mr. Steele?

I would like to turn the microphone over to the MLA for Kings West.

MR. JON CAREY: Mr. Chairman, I'm pleased today, in the spirit of education and experience, to introduce from our constituency a student, Erin Ward, who will be with us for the day to see how things operate in the Legislature and in our caucus. We welcome you today.

MR. CHAIRMAN: Erin, I would ask you stand and receive our recognition. (Applause) Thank you, and welcome.

The next 20 minutes of the first round will go to the MLA for Halifax Fairview. It is 8:19 a.m.

MR. GRAHAM STEELE: Mr. Chairman, according to the material that we have before us today, the last annual report of the Seniors' Pharmacare Program was issued for the year 1997. Is that true, Ms. Hubbard, and if so, why?

MS. HUBBARD: Yes, that is true. In 1997, we moved away from the annual report. We still do the financials and we have amalgamated the information from the annual report into the Department of Health publications, the statistical tables that were also provided in that package.

MR. STEELE: As you said, it is a complicated program with many facets and I think it could be very helpful if the department were to go back to the annual report format rather than folding it into a more general departmental information piece. I think it's regrettable that for such an important program there has been no dedicated annual report for five years.

The reason that Seniors' Pharmacare is back before this committee again is it continues to be of interest to all of us, certainly to all of the seniors who are enrolled, and I'm sure every MLA on the committee and in the Legislature hears regularly from constituents about the program and how it's working. Very small changes in the program, like increasing

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the premium this year by $10 a month, can have a very profound impact on individuals and on their use of prescription drugs.

Part of the problem that we see over here is that it seems sometimes the decisions about the structure of the program are dictated more by short-term political needs than by long-term health outcomes, that not enough regard is given to the impact on health outcomes on the use of prescription drugs, on the individual seniors where they live, of increases, for example, in the co-pay, increases in the premium, decisions to de-list certain drugs, all of this can have a profound impact on individuals.

Ms. Hubbard, the last time you appeared before this committee, the day after there was an article in the Halifax Daily News, and I'm just going to read a paragraph from an MLA at the time. The quote is this:

"I found it particularly regrettable that the department has undertaken policy changes which result in an increased burden on seniors and have put in place apparently no tools for evaluating the impact of those program changes . . . "

That was a quote from Darrell Dexter, the member for Dartmouth-Cole Harbour, who at that point was sitting on the Public Accounts Committee. Now here we are, two and a half years later; what tools, what knowledge does the department have in place for ascertaining the impacts of these program changes on seniors?

MS. HUBBARD: As I outlined in my brief presentation earlier, there are a number of initiatives that we have put in place to identify critical drug care issues. We do that through both looking at our utilization through our computer systems, we have input from the seniors' groups, from physicians and pharmacists, from our expert advisory committee and our drug evaluation committee to look at issues, and through our academic detailing program, we actually go out and do direct interventions with physicians to deal with these issues.

As well, we also have computer-generated reports that look at patient medication histories. We have the drug utilization review process, which also looks at patient medication histories and staff actually contact physicians and pharmacists and work with them to ensure that appropriate medications are being taken by seniors. We also meet monthly with the Group of Nine and ask them to bring issues to us. Our staff go to meetings of seniors' groups. We deal directly and on a regular basis with physicians and pharmacists who provide the direct care to these patients. They alert us if they see any issues, as well.

Currently, we are also working with the Old Age Security office to see if we can identify additional seniors who might qualify for the Guaranteed Income Supplement, which is a federal supplement to the Old Age Security that provides additional income to seniors. We're trying to identify more of those people in that low income bracket. There are a number

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of initiatives that have all kinds of information fed into them, in trying to deal with the issues around seniors and their medications.

DR. WARD: If I might just add, the challenges around this monitoring program, I think, as you pointed out earlier, this is a very complex program. The pattern of ordering of pharmaceuticals for various diseases changes as new medications come on, and it is one of the problems we will be tracking, changes in the use of various types of anti-hypertensive. If an individual recovers from a certain disease, the medication will be stopped. The normal turnover of the population, as our seniors pass away over the course of a year, the database and the individuals in the database are constantly changing. The opportunities to follow every individual patient and review every individual medication and the utilization is simply not possible at the current time.

MR. STEELE: One of the things you mentioned is consulting with the Group of Nine, which is all very well except you will recall that prior to the last budget the Group of Nine made, I think, seven recommendations, and the government accepted one of them. It's one thing to consult with representatives of seniors' groups, it's another thing to actually take their advice. When you were last before this committee, Ms. Hubbard, there was a reference made to a McGill University study sometimes called the Tamblyn Report, March 1999.

The conclusion of that report was "In a more detailed analysis of the first 10 months of the plan . . .", this is the Quebec Pharmacare Plan, " . . . the researchers discovered that the new drug plan increased the number of serious adverse events (hospitalisations, institutionalizations and deaths) in the population." Then they go on to quantify that finding.

At the time, Ms. Hubbard, you cast a little doubt on whether those conclusions were acceptable. Over the passage of time, what is your view now with the Tamblyn Report, which concluded that the increases in premium and co-pay had actually resulted in worse health outcomes for the population of Quebec? What is your view of that study now?

MS. HUBBARD: Not really much different than it was at that time. Certainly there's been no additional information to validate the findings of that report.

MR. STEELE: Or invalidate them either.

MS. HUBBARD: Or invalidate them, you're correct in that. At the time, I think when that study came out, certainly there was some question about the linking of cause and effect that one was directly responsible, the raising of the premiums and co-pays was directly responsible for their findings and that there were other things that were happening at the same time that could have contributed to those outcomes. While we don't doubt that there was impact, we can't - or I can't, certainly - say that it was what they found. The other thing that I think is notable in that study is they went from a very low co-pay of approximately $2 to almost $700 or $750 a year. That is a significant change.

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MR. STEELE: It did go from $2, but it only went to $750 for the very highest income seniors. Now, in 1998, according to the Canadian Health Services Research Foundation, a study was funded and was commenced with the following title: The effects of changes of co-payment & premium policies on use of prescription drugs in Nova Scotia Seniors' Pharmacare Program. This was a funded project. According to the foundation's Web site, the lead investigator was George Kephart. Whatever happened to that study?

MS. HUBBARD: I don't understand your question.

MR. STEELE: According to this Web site, the funding was allocated in 1998 for a study of the effect of the co-pay and premium policies on the use of prescription drugs, specifically in Nova Scotia. That study was funded but we've never heard the result of that study. What happened to that study? Do you know? Have you seen it?

MS. HUBBARD: Yes. Dr. George Kephart, I think, was the principal investigator in that. It was presented May 24, 2002 at the Canadian Health Economics Research Associations annual conference in Halifax.

MR. STEELE: And what were Dr. Kephart's conclusions?

MS. HUBBARD: I'm not overly familiar with it. The analysis examined utilization variances in essential diabetes drug consumption between 1989 and 1998. The analysis focused on the July 1991 change from a flat fee of $3 per prescription to a 20 per cent co-payment. The study found there was small reduction in use for a period of about 3 months by seniors with low annual drug costs, those that had a low expectation to exceed annual co-pay maximums. The study concluded that co-pays led to underutilization of these drugs and recommended the use of premiums, rather than co-payment, on the assumption that they impact appropriate drug utilization to a lesser degree.

[8:30 a.m.]

MR. STEELE: So if I'm understanding that correctly, then what really has an adverse impact on the use of prescription drugs is the co-pay component.

MS. HUBBARD: In this study, it also showed that only 9 per cent of the seniors sampled were considered low income and only 20 per cent were deemed to be impacted by the policy, which amounted to 24 seniors.

MR. STEELE: That was for one specific drug type, correct?

MS. HUBBARD: That was for oral anti-hyperglycemic drugs.

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MR. STEELE: It's for people more versed in the sciences than I to say whether that conclusion can be extrapolated but if you talk about 20 per cent of a population being impacted, we have over 100,000 seniors registered in Pharmacare, don't we?

MS. HUBBARD: It's 20 per cent of the 9 per cent is what I think . . .

MR. STEELE: It's 20 per cent of the 9 per cent, okay, but if that conclusion for that one drug type is valid - and I know that's a big "if" from a scientific point of view - and you have 20 per cent of 9 per cent, you still have several thousand seniors who are discouraged from taking the appropriate amount of drugs because of the co-pay, which a couple of years ago was shot up to 33 per cent, for a total of $350.

I won't speak for anybody else's constituency but I will certainly speak for mine and I will tell you that there are many seniors in my constituency who simply cannot afford $350, they simply don't have it. If that is the price for them to get their drugs, they won't take their drugs because they don't have the money. I'm sure you have heard the stories, as I have, of seniors who ration their pills, who simply won't go to get their pills.

A couple of years ago one of the Liberal members referred to seniors cutting their pills in half as a way of rationing. I was talking to a pharmacist a couple of days ago who said the province really has no idea what the impact of the co-pay and premium is on the use of prescription drugs because it's a very human problem. Many seniors, for example, are too proud to admit that they can't afford it, so none of your databases really will show that, the senior who is simply too proud to get a prescription that they know they can't afford.

I think this is the first we have heard of the result of this Kephart study and if you have a summary there or if you have the complete study, perhaps you could table it so that all the members of the committee could see it. I think this is going to be a very interesting conclusion as the debate over Seniors' Pharmacare continues.

MS. HUBBARD: If I might comment, if you look further in the study it also shows that good decisions were made which minimized any potential harm from the policy changes and helped to ensure that the program continued and seniors received their medication, just in conclusion.

MR. STEELE: Obviously you have the benefit of having seen the study and I haven't. I was only aware that it had been undertaken, so if you do have a copy with you perhaps you could table that. If it's been presented at a conference, then I assume there is no problem with it being released. I think that's a very important piece of information.

MS. HUBBARD: I don't have a full copy with me but I can get one.

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MR. STEELE: Perhaps you could table whatever it is that you have. I would like to turn to a broader question. There are a lot of unknowns here, I think. We have the Tamblyn Report from McGill and their conclusion was that if premiums and co-pays go up too much, it will result in higher health care costs.

We have this new Kephart Report which indicates, or appears to indicate, that co-pays are the factor that will, if anything, have a result on the use of prescription drugs, it will be the co-pay. Then we have the Romanow Commission which is about to release its report and undoubtedly, there will be an extensive discussion in there of Pharmacare. I guess this question should go to Dr. Ward. Is the Department of Health willing to hold off on any further increases to premiums and co-pays until we know for sure what the health impacts of those increases might be? I would submit to you that right now we don't know and we shouldn't be making those increases until we do know.

DR. WARD: That particular policy decision is the policy decision to be made by Treasury and Policy Board of government. It's not a decision made by the Department of Health.

MR. STEELE: Dr. Ward, you're the top health official, if I can put it that way, of the Government of Nova Scotia and as I said earlier, what has always concerned me the most about Seniors' Pharmacare is that the decisions about what to charge and who to charge appear to be made by the political people and the financial people rather than the health people. Surely, the top health official has some input or impact on the decisions that are made?

DR. WARD: You're absolutely right. I would like to believe I do have some impact, but at the end of the day, the final decisions do rest with the government of the day.

MR. CHAIRMAN: Mr. Steele, you have two minutes.

MR. STEELE: Let me turn then to the question of Aricept, an Alzheimer's medication, which has - in patients with mild to moderate Alzheimer's - been shown to have some positive impact. It's not currently covered in Nova Scotia. It is currently covered by the Pharmacare programs of five other provinces, covering 75-80 per cent of Canada's population. Why is Nova Scotia not covering Aricept?

DR. WARD: At the current time the anti-Alzheimer's agents, including Aricept, the acetylcholinesterase group - there is a third drug on the market - are currently being reviewed by the Atlantic expert review group. As you point out, this drug is covered in five other jurisdictions, it has not been covered in Atlantic Canada to date. The challenge that is before governments again is to find the evidence to show that it is effective and in what populations. At the current time there is a significant percentage of seniors in Atlantic Canada with dementia. Those dementia do not only appear with Alzheimer's disease, there are many other

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types. Within the Alzheimer's group itself, there is a percentage of those individuals who could potentially benefit from this. We are currently having a series of discussions through the expert advisory review group with experts to talk about how we could put in place reasonable clinical guidelines to identify the appropriate patients to ensure that they can potentially get the medication and that, in fact, the medication is effective.

These drugs are extremely expensive and the opportunities of funding them, again, gets to be a bit of a question. Our general sense is that in the Alzheimer's population, someplace between a quarter to 40 per cent may potentially benefit, but the issue is the identification of those individuals and the treatment. Giving the drugs to other patients with no potential benefit is a difficulty for the department, it is an inappropriate use of public funds. So we're in the process of trying to come up with a reasonable solution to this difficult problem.

MR. STEELE: I will get back to that later, Mr. Chairman, but I know my time is up now.

MR. CHAIRMAN: I would just like to clarify, Ms. Hubbard, the document that you refer to will be provided to Ms. Stevens, please. In return, that document will be circulated to all members present. Thank you.

MS. HUBBARD: I will get a copy of the study and provide it, yes.

MR. CHAIRMAN: Okay. It's almost 8:40 a.m. and the next 20 minutes belong to the Liberal caucus, the member for Cape Breton West, Mr. MacKinnon.

MR. RUSSELL MACKINNON: Thank you, Mr. Chairman. I would like to follow up on this issue of Aricept. What particular evidence, through you Mr. Chairman to the deputy minister, are you looking for that the other provinces have accepted that you don't accept? Essentially, what additional evidence are you looking for? If a large percentage of the Canadian population is already using it, why do you have to hide behind the veil of this Atlantic board to be able to come up with this decision? Can't Nova Scotia make that decision for itself?

DR. WARD: Certainly Nova Scotia can make that decision for itself. The issue of the five other jurisdictions which have listed the anti-Alzheimer's medications on their pharmaceutical formulary, my only comment would be that in the bulk of those jurisdictions they were listed in the months preceding provincial elections.

MR. MACKINNON: So you're saying that they were political decisions, not based on medical evidence.

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DR. WARD: The general sense is that there was some potential political expediency with those decisions. At the current time, most of the studies done with respect to these medications, as Mr. Steele pointed out, show that a percentage can't potentially benefit from these medications. But again, the proper identification of that patient population, ensure they get the appropriate medication, they're properly followed up and they're properly evaluated. These medications are not inexpensive.

MR. MACKINNON: Has the Seniors' Pharmacare board made a recommendation to the department as to whether Aricept should be included?

DR. WARD: There is no Seniors' Pharmacare board.

MR. MACKINNON: There isn't? First of all, I must comment on the information that you've supplied from the department because it's obsolete, it's two years obsolete, which again goes to the issue I've raised before on the information that's being provided by the Department of Health. It always seems to be obsolete. Now, I don't know if that's calculated or if that's just that things are in such disarray over there, but it's two years obsolete. One of the issues, information provided in a list of the Seniors' Pharmacare board of directors for 1996-97 so you're saying that board doesn't exist anymore.

MS. HUBBARD: The board was in existence then, but is not anymore.

MR. MACKINNON: So the government has done away with the advice from the Senior Citizens' Secretariat, Nova Scotia Pharmaceutical Society, Pharmacy Association of Nova Scotia, Medical Society, the Nova Scotia College of Physicians and Surgeons, the Department of Health, Finance and so on. So you don't have that committee in place anymore?

DR. WARD: The previous administration removed that board in 1997.

MR. MACKINNON: But it's never been replaced?

DR. WARD: No.

MR. MACKINNON: That's a fair comment. Let's move on to the next one. The corporate plan that was unveiled (Interruptions)

MR. CHAIRMAN: Order, please. Mr. MacKinnon, you have the floor.

MR. MACKINNON: The corporate plan that was unveiled on September 19th, were you in attendance at that meeting?

DR. WARD: Yes.

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MR. MACKINNON: Do you agree with that plan, vis-à-vis the Department of Health?

DR. WARD: In what sense?

MR. MACKINNON: I notice in this plan there's no mention about Pharmacare whatsoever. Is there any particular reason for that?

DR. WARD: As you point out, that is the government's corporate plan. I would suggest that you probably should raise that issue with the minister.

MR. MACKINNON: Did you give any advice as to what should be included in that corporate plan?

DR. WARD: No.

MR. MACKINNON: You didn't? So it was a plan that was presented to the various government departmental officials as to what the government wants department officials to do?

DR. WARD: I don't believe that's true. I think it was presented to officials to provide the senior leadership in the bureaucracy with a sense of direction that the current administration plans on taking or is heading towards.

MR. MACKINNON: Who presented that plan?

DR. WARD: Jamie Baillie.

MR. MACKINNON: And, anyone else?

DR. WARD: No.

MR. MACKINNON: No? And, is that the same Jamie Baillie from the Premier's office?

DR. WARD: Yes.

MR. MACKINNON: The other issue is with regard to the budgetary figures that your colleague presented. I was looking at the estimates, she indicated a figure of approximately $113 million whereas the estimates figures are different. The estimate for 2000-01 was $83,250,000 and the actual spent was $73,260,000, which is $9.9 million less than the department head estimated, and for the 2001-02 fiscal year the department budgeted $85.5

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million for Pharmacare and only spent their estimate. They're spending $81.5 million, so that's $4 million less. How do you account for the difference in the figures?

[8:45 a.m.]

MS. HUBBARD: The numbers that I referred to earlier, when I was doing the presentation, were total expenditure numbers. The $113 million in 2001-02 was the total cost of the program, including a contribution from government and seniors; and the $7 million that I had referred to when the program started was the total cost of the program as well.

MR. MACKINNON: Are you expecting increased expenditures on the Pharmacare Program for the upcoming fiscal year, based on the tracking of the program to date?

MS. HUBBARD: Our estimate for this year is the total program will cost $122 million, $122.5 million is what we're forecasting right now from $113 million last year.

MR. MACKINNON: I want to go back to Aricept if I could because there's an argument that if that drug were to be utilized that would - it's used to contain and perhaps delay Alzheimer's, the effects of Alzheimer's in individuals. In certain cases, that's correct, not all cases. But has the department done any cost analysis to find out if, in fact, it would be beneficial, just strictly from a cost point of view, to the department utilizing that because there are many seniors, I know seniors in my constituency who are forced to go to nursing homes because they can't stay in their own homes because of Alzheimer's, and their families can't give the health care that they need because of that, and even with the caregivers in nursing homes, for example, the Home Care Program with individuals with the preliminary stages of dementia, it's very difficult for them. Has the department done any cost analysis on that?

MS. HUBBARD: Through the Pharmacare Program we have done some costing around Aricept and currently in Nova Scotia there are approximately 5,000 seniors with Alzheimer's. According to any of the studies around Aricept, approximately 2,000 of those seniors could potentially be candidates for the drug. If there are 2,000 people on Aricept in our seniors' plan, it would cost $3.6 million. If we have to provide it to, or if we provided it to all seniors with Alzheimer's it would cost approximately $9 million.

MR. MACKINNON: Is there any indication as to, of that number, how many would actually benefit by the use of that?

MS. HUBBARD: Potentially it's the 2,000.

MR. MACKINNON: So the department has identified that Aricept would be a benefit to that 2,000?

[Page 16]

MS. HUBBARD: No, it's just using the numbers in the studies, and the studies say that it will or could potentially work for 2,000 of the current Alzheimer's patients who might fall into that category.

MR. MACKINNON: So it's a cost issue is what you're saying; it's $3.6 million on your budget?

DR. WARD: At the current time the anti-Alzheimer's group of medications are being reviewed by the Atlantic Canada Expert Review Board with a view of trying to define that population and to understand appropriate protocol for the use of these medications. Very clearly, if we can identify some benefit, if the expert review panel brings that forward to us as a recommendation with those guidelines, the department will deal with it at that particular time.

The challenge, I think, very clearly, is to identify that population to make sure the right patient is getting the right drug. It's not a decision for the department. We've asked an expert group of geriatricians and others to participate in the program to do that evaluation and to provide a recommendation back not only to Nova Scotia but to our Atlantic Canada sister provinces.

MR. MACKINNON: You know as well as most people that going the Atlantic route would be a very easy way for a government to suggest why they shouldn't cover the cost of Aricept because they're umbrellaed in in other jurisdictions and tied into their budgetary matters. So it really is a cop-out I think that one could easily argue because if the other five provinces have done it on their own, despite the fact that you feel that perhaps they were politically motivated, I'm not so sure that more than three-quarters of the Canadian population would agree with you, but certainly they're receiving Aricept, but the Province of Nova Scotia could very easily make that determination on its own, correct?

DR. WARD: The process with the Atlantic review group is that they will make a recommendation to every province and then each province has the opportunity to respond to that recommendation with a yes or a no.

MR. MACKINNON: Who within the department, let's say the senior bureaucrat who would make the recommendation to government once it goes through these processes and mazes and everything, who ultimately sits down and says to you or to the minister, here's what we recommend? Who, in this bureaucracy, makes that recommendation?

DR. WARD: The deputy minister.

MR. MACKINNON: So what you're saying is you're the one who is not making the recommendation at this point?

[Page 17]

DR. WARD: I've not received the recommendation from the expert advisory review panel yet.

MR. MACKINNON: Have you asked for it?

DR. WARD: As I've indicated I think two or three times in this morning's discussion, those medications are currently being reviewed by that group.

MR. MACKINNON: That wasn't my question. Have you asked for it?

DR. WARD: I anticipate receiving it when the review process is completed.

MR. MACKINNON: So, in other words, you don't want to answer the question. I'm being point specific here. If you really want to include it in the program all you have to do is say to that committee, we would like you to make a recommendation to us, period. Just "mazing" around isn't answering the question. There are 2,000 seniors in this province who would like to receive that.

DR. WARD: Mr. MacKinnon, the committee has been asked by the deputy ministers to review these drugs.

MR. MACKINNON: No, I'm not talking about other provinces. I'm talking about the Province of Nova Scotia. So what you're saying is you would rather just umbrella yourself with the other provinces on this process? Is that what you're telling us?

DR. WARD: No, I'm saying that we have an agreement to pool our resources in Atlantic Canada to provide for a process to look at these medications and to provide expert advice to Nova Scotia on the use of these medications. That review has been requested and we are awaiting those results.

MR. MACKINNON: I would like to shift the focus just slightly, since you don't want to answer the question. The government members have been consistently saying that the federal government only funds 14 per cent of the budget. Do you agree with that?

DR. WARD: I can't really answer that, I'm not an economist.

MR. MACKINNON: Is that why you don't show up for budgets when they come before the House, because you don't follow the numbers within the department?

DR. WARD: I very closely follow the numbers within the department.

MR. MACKINNON: But you can't tell us what percentage of your budget comes from the federal government?

[Page 18]

DR. WARD: Minister LeBlanc and his staff can. As you are well aware, Mr. MacKinnon, CHST and other funds that flow from the federal government go into general revenue.

MR. MACKINNON: So you have no idea what percentage of your budget comes from the federal government?

DR. WARD: No.

MR. MACKINNON: Well, I must say that's in stark contrast to what's being put out by government members.

How much time do I have left?

MR. CHAIRMAN: Just under four minutes, Mr. MacKinnon.

MR. MACKINNON: With regard to the co-pay and the premiums that are being paid by seniors - based on what you've been saying in terms of the increase in cost, given that there will be no changes in revenues coming from the federal government, or any other sources, do you expect that there will be an increase in the cost of co-pay or premiums or do you accept the fact that perhaps the growing population of seniors will be compensated because they'll be paying more into the program? The sustainability of the program is really what I'm talking about.

MS. HUBBARD: Certainly the program continues to grow, but I can't comment on whether or not there will be increased premiums or co-pays, I don't know that.

DR. WARD: Just a quick follow-up to a comment you had made, the issue about revenues, the revenue streams for the province through CHST and other general revenues are things that Minister LeBlanc can comment on. As you're well aware, the CHST portion goes into general revenue. There are no specific transfers from the federal government to the Department of Health, with the exception of funds around programs such as the veterans and a few other individual pieces that we have. We would be happy to provide you with those numbers if you're interested, but as a general sense of what percentage of the Department of Health's budget comes from the federal government, that's an issue.

MR. MACKINNON: You don't know.

DR. WARD: No.

MR. MACKINNON: Well, let's focus on user fees. The department has a considerable number of user fees. Have you implemented any new user fees in the last fiscal year, or in the current fiscal year that would have an impact ultimately on the sustainability

[Page 19]

of the Pharmacare Program? In other words, what new user fees have you implemented that you didn't have before?

MS. HUBBARD: With the Pharmacare Program?

MR. MACKINNON: Well no, within the department, because obviously the total number of dollars in your department would have an impact on the Pharmacare.

DR. WARD: The total number of dollars does have a direct impact on the funds available for Pharmacare. The annual allocations towards each of the various divisions within the department are determined through the annual budgetary process. Any increase in user fees charged by the province go into general revenue.

MR. MACKINNON: Would you provide us with a list of those user fees, the user fees of the department currently?

DR. WARD: Yes.

MR. MACKINNON: I would like to go back to this corporate plan. In the corporate plan it indicates that the government should manage your stakeholders and then, put in brackets, "absolutely crucial". When the presentation was made to yourself and other department officials, Dr. Ward, what input from the department was provided in terms of some of these issues around health care, particularly since one of the major strategic objectives is to "reduce the anxiety and emotion", was there any discussion on that from your department?

DR. WARD: In what sense?

MR. MACKINNON: When the presentation was made?

DR. WARD: No, the presentation was given to a large number of individuals. At the completion of the presentation, . . .

MR. MACKINNON: So what you're saying is the department didn't have any input in the particularization of this report?

DR. WARD: As you indicated earlier, and as I indicated earlier, this is a corporate plan of government.

MR. MACKINNON: But that wasn't my question.

[Page 20]

MR. CHAIRMAN: Excuse me, Mr. MacKinnon. Dr. Ward, do you have anything more to add to the answer to these questions, because I'm going to turn the next 20 minutes over to the government?

DR. WARD: No.

MR. CHAIRMAN: You will have to go back to that point, Mr. MacKinnon, and I apologize for interrupting you.

It's 9:00 a.m. and the next 20 minutes belong to the government caucus. The MLA for Yarmouth, Mr. Hurlburt.

MR. RICHARD HURLBURT: Good morning, Dr. Ward and Ms. Hubbard, welcome to the Public Accounts Committee. For the record I would like to go back a bit. Pharmacare for seniors was introduced in 1974-75, am I correct on that?

[9:00 a.m.]

MS. HUBBARD: Yes.

MR. HURLBURT: And the cost was approximately $7.2 million?

MS. HUBBARD: That's correct.

MR. HURLBURT: And there were approximately 77,000 seniors on the system back then?

MS. HUBBARD: Yes, that's right.

MR. HURLBURT: And today we have approximately 93,000?

MS. HUBBARD: Correct.

MR. HURLBURT: In answering one of my colleague's questions, did you not say the cost was going to go to $122 million in 2002?

MS. HUBBARD: Yes, in 2002 . . .

MR. HURLBURT: That's the estimate for 2002?

MS. HUBBARD: That's what we are projecting, yes.

MR. HURLBURT: Do you have any projections for 2002-03, the cost?

[Page 21]

MS. HUBBARD: Sorry, that is the projection for 2002-03.

MR. HURLBURT: It is $113 million for 2001-02?

MS. HUBBARD: Right and the projection for 2002-03 is $122.5 million.

MR. HURLBURT: Am I correct in saying it was 1995 that Pharmacare premiums were introduced in this province?

MS. HUBBARD: Yes, that's correct.

MR. HURLBURT: And that was based on 50/50 pay with seniors and the province?

MS. HUBBARD: That was the plan at the time, that it would be a 50/50 cost sharing between seniors and government.

MR. HURLBURT: So, it was only year one that that plan was implemented? Did it go to 50/50 in 1995?

MS. HUBBARD: The 50/50 cost sharing was on the books for several years, I'm not exactly sure what year. However, we didn't achieve the 50/50 cost sharing between government and seniors.

MR. HURLBURT: In the year 2002, what is the pay for the seniors, what percentage?

MS. HUBBARD: For 2001-02, the seniors portion was 26.6 per cent and 73.4 per cent for the government share.

MR. HURLBURT: Dr. Ward, do you have any stats on how this relates to other provinces in Canada, especially Atlantic Canada?

MS. HUBBARD: I can provide some of that. In Atlantic Canada, in New Brunswick and Newfoundland, in their seniors programs, they cover the low income seniors who receive the Guaranteed Income Supplement only. They do not provide drug coverage for those who do not receive the GIS who are seniors. There is a plan as well, in New Brunswick, provided through Blue Cross and the government, where non-GIS seniors can access drug insurance. Their current premium in that plan is $1,068 per year with $15 co-pay per prescription with no annual maximum. In P.E.I., all seniors are eligible to join their plan and they pay $10 per prescription, plus the pharmacist professional fee on each prescription and there's no annual maximum on that.

[Page 22]

Those are the ones we are most familiar with. Some of the other provinces: Quebec's premium is $422 a year, they have a deductible, the first $9.13 of drug costs per month and low income seniors pay 25 per cent co-pay; in Saskatchewan some seniors pay $850 every six months for deductibles before they are eligible for the program, lower income people pay $200 every six months in a deductible before their plan kicks in. In Saskatchewan, seniors pay 35 per cent co-pay of each prescription, and there's no annual maximum.

MR. HURLBURT: Would you give me the stats again on New Brunswick, I'm sorry I missed part of that.

MS. HUBBARD: In New Brunswick, the government-funded Pharmacare is for Guaranteed Income Supplement seniors only, and for the non-Guaranteed Income Supplement seniors, if they join the insurance program that's available to them, they pay a premium of $1,068 a year and then pay $15 per prescription with no annual maximum. In the low income, they pay $9.05 per prescription.

MR. HURLBURT: What mechanism do we have in this province for policing the drug costs and the prescribed drugs by the physicians in this province?

MS. HUBBARD: As mentioned earlier, we have a number of programs, including we do ongoing review of our claims that are submitted by pharmacies and obviously written by physicians. For specific drugs, such as narcotic and controlled drugs, we fund a program called the Prescription Monitoring Program. That program tracks all narcotic and controlled drugs, and letters are sent out to physicians or pharmacists on any increased use or potential abuse by patients. That covers all patients in the province receiving those drugs. That is actually managed by a board through the College of Physicians and Surgeons, the College of Pharmacists, the Dental Association, and the department sits as an observer on that. There are a number of mechanisms that we track and review medications or prescriptions in the province.

MR. HURLBURT: I'm sure you've heard the terminology snowbirds, who leave our great province to go South for the winter. What mechanism is there for those people who go for their 180 days or whatever their allowance is to be out of the country? Do they have to get their drugs in advance here, or are they allowed to get them in whatever state they're in? How does that work?

MS. HUBBARD: Under the Nova Scotia Seniors' Pharmacare Program, we allow seniors up to a six months' supply so that they can take them with them. We don't normally pay for prescriptions outside the province.

MR. HURLBURT: They pick up the drugs here before they leave?

MS. HUBBARD: Yes, that's correct.

[Page 23]

MR. HURLBURT: Why I am asking about this, my dear mother is a very young senior, 84 years young. I was at her place last weekend when I was home. She had been to her doctor and they had three different prescriptions of drugs for her. She has been paying her end of it. The drug was not working so they said, well, here take this drug. That drug was not working, and finally the third. But it cost her $114 for the first one, $79 for the second one, and then they finally went to the third one and I forget the cost for that. That's why I'm asking about policing. How do we curb some of that so that it's not costing the taxpayers or the seniors? Is there any way that can be policed better to help the seniors and the province?

MS. HUBBARD: Certainly we encourage physicians and pharmacists, in the cases where there is a new medication, to try seniors on a smaller quantity than the full amount, if they're not sure that it's going to work. You bring up the cost of it, there is also a maximum. We try to protect the seniors with the maximum that they can pay on those co-pays. We do participate each year with the Pharmacy Association of Nova Scotia in medicine-cabinet cleanup, where they invite people to bring their unused medications back. At that time, we try to increase the awareness of the cost of these unused drugs and ways to prevent those drugs from being wasted.

MR. HURLBURT: I just found it a terrible waste. There was approximately $200 worth of drugs that had to be flushed. The costs were still there, regardless of whether my darling mother had to pay for that or the taxpayers had to pay for it, it still had to be paid for. The escalating cost of drugs, it's just unbelievable how they're going.

Dr. Ward, you mentioned to my colleague here that you could not answer where the funding came from for your department, but if the stats are correct and what we're hearing and seeing in the documentation that we have, 86 per cent is being paid by all the provinces in Canada, not only in Nova Scotia but all the provinces, and the feds, 14 per cent. I think every member in this great Chamber would dearly love to pay for all the drugs for the seniors, but if those percentages are correct, and if it was 50/50, what would that do for this province in health care, if the federal government came back to the table and paid their share of what they should be paying?

DR. WARD: When you say return to 50/50, do you mean 50/50 pay for all of the current group of health services?

MR. HURLBURT: Yes.

DR. WARD: It would mean approximately $1 billion a year. It is unlikely we're going to see that. As was raised earlier, the issue of participation by the federal government, potentially, in pharmaceutical programs will be brought forward by Mr. Romanow. Certainly the Kirby report brought forth the concept of the federal government's participation in catastrophic drug costs for Canadians. That was a program recommended by the Standing Committee on Social Affairs, Science and Technology, where individual Canadians who had

[Page 24]

accrued costs of greater than $5,000, the federal government would be participating in a 90 per cent federal government, 10 per cent provincially-funded program. At least that was the recommendation. There are about 600,000 Canadians who fall into that category. To reach the $5,000 limit would be a mix of personal, private and public insurance programs. What Mr. Romanow will do with respect to that and the seniors program, we have no idea. I do expect, though, he will be making somewhat similar recommendations.

MR. HURLBURT: Mr. Chairman, I would like to turn it over to my colleague.

MR. CHAIRMAN: The honourable member for Sackville-Beaver Bank.

MR. BARRY BARNET: Mr. Chairman, how much time do I have?

MR. CHAIRMAN: You have six and a half minutes.

MR. BARNET: Dr. Ward, at the start of your presentation you spoke about drug promotion, and you showed us a picture of an ad. Was it a trade publication?

DR. WARD: It's the Canadian Medical Association Journal which, I guess, is for physicians, so it's a trade publication.

MR. BARNET: There has been considerable attention in the media on the issue about the promotion of drugs to doctors and the salesmen's visits. We've seen some articles in the news about doctors participating in weekend seminars. As well, we've seen ads on the TV ourselves. I've always been perplexed at some of the ads. They claim great cures to some very difficult diseases to treat, and then at the end of the ad there's a disclaimer that says that it may have side effects on people who are in a certain age group or a certain weight or other health risks. I think by the time you go through that list of disclaimers, you find that just about every single person actually fits into that category. It's been an issue, I know, with the medical field itself.

I know that the Canadian Medical Society has initiated some due diligence with respect to self-regulating their own industry. I wonder, from your point of view, Dr. Ward, what have we done and what can we do, the Province of Nova Scotia, to ensure that this promotion of drugs doesn't get to a point where it's costing Nova Scotians not just money, but their lives and their health as well?

DR. WARD: Your comments earlier about the television ads and stuff is a reflection of the fundamental difference between the United States and Canada. In the United States, direct-to-consumer marketing is really prohibited, and when we see ads through TV and other media, it is really the direct-to-consumer marketing programs in the United States, which are quite important.

[Page 25]

[9:15 a.m.]

Within the pharmaceutical manufacturing industry, most drug companies spend a significantly greater percentage of their dollars on advertising than they do on research and development. Within Nova Scotia, in particular, in addition to some of the processes that Alan had talked about earlier, we're very keen to move forward on what we've called academic detailing. At the current time, most pharmaceutical manufacturers will send a drug rep or a detail person around to visit with physicians at which time they generally speak highly of their own particular products. Rest assured that Aventis people are probably selling Aventis medications and not Wyeth or Squibbs, or somebody else's, often leaving free samples, leaving lots of literature to go into the doctor's waiting room for the patients to read about these medications.

The concept with academic detailing that we've taken forward is really to try to provide some expert advice around various classifications of medications, so that for some of the new medications like the Coxibs inhibitors, in fact, we would have a detailing program of a trained pharmacist to go and spend time with each individual physician, not only to talk about that particular class of drugs and the appropriate use of them, but also to give some sense, is there a better one of the multiple medications on the marketplace. It's a very competitive marketplace, as you know. Most pharmaceutical manufacturers are very much in a competitive business with other pharmaceutical manufacturers and there are often just minuscule changes in the dose or the chemistry or the colour of the pills or the timing schedules or, to a great extent, the marketing that defines the effectiveness in terms of the ability of a company to sell.

We would like to think that as we move ahead within our own program in the department that we can, in fact, do a bit more in terms of trying to help the public understand a bit more about the medications piece. I have recently challenged the pharmaceutical industry, at least the beverage producing companies have come out with a program about the safe use. It would be very nice if the pharmaceutical manufacturers would come out with the safe use around medications to talk about completing a trial to making sure you're taking the appropriate doses at the right time. To me, that would be a good citizenship thing. I'll be interested to see whether or not they choose to take up the challenge.

MR. BARNET: It's interesting, Dr. Ward. It seems to me that some of the drug salespeople have moved out of just the doctor's office and in some cases, into the MLA's office as well. I know that I've been approached by a number of salespeople, particularly with respect to diabetes drugs. I've often been curious as to why, when I went to visit the doctor, there seemed to be a number of people in the doctor's office with large briefcases waiting to see him as well and they kind of slipped in between appointments. We know they're there to try to promote their interest and their interest is to sell their products to Nova Scotians. It's a very real issue that has to be addressed and I think that we need to do more about it in terms of due diligence.

[Page 26]

The second point with respect to that is the actual cost of drugs on the overall health care system. We know that it must represent a tremendous amount of money, not just to Pharmacare, it's all of Pharmacare's expenditure, but to the overall health care system. My question is, having seen some real examples of costs of drugs and the variance between costs of drugs - and I look to one example, it's the drug Cipro, but it's the drug that became famous about a year ago as the Anthrax drug or the anti-Anthrax drug. I know from my own experience, I had a prescription for that drug for pneumonia symptoms. When I did the average cost, I think it was $5 or $6 per pill and then I noticed almost a week later, through the media, that the federal government was purchasing those pills for $1 per pill, and I know that others have explained to me that those pills cost nearly $10 per pill a year or two before that. My question . . .

MR. CHAIRMAN: Mr. Barnet, it's a very relevant question and I'm looking forward to the answer, but . . .

MR. BARNET: Can I just give one question? How does Bill C-91 impact on our drug costs with respect to this patenting and the nature of that?

MR. CHAIRMAN: Thank you. Dr. Ward, take all the time you want to answer that - Ms. Hubbard, go ahead.

MS. HUBBARD: I can answer that. When Bill C-91 was introduced we, as a department, made presentation to the federal government concerning that bill and our opposition to that length of patent protection. It currently provides pharmaceutical manufacturers with 20 years of patent protection around a drug; and the costs of that bill are significant to all drug programs and all drugs, whether it's through a provincial drug program or that someone is paying for it themselves. We understand that there's supposed to be a discussion around that bill some time late this Fall or early in the Spring about issues that, while it may not reduce the 20 years patent protection, it may allow for a generic to come on the market as soon as the patent expires. At the current time, the brand name manufacturers can actually take a generic manufacturer to court without evidence and hold off a generic competitor for, I think, approximately two years - 24 months. So we'll be looking to make representation to that committee that will be looking at that bill around some of the issues we have and the costs to our systems and to our public.

MR. CHAIRMAN: Thank you for that. We're going to go to our second round and I will ask each caucus to relegate their questions to 10 minutes, which will allow us wrap-up from our witnesses and one short announcement about next week's session.

It's coming up to 9:23 a.m. and the next 10 minutes belongs to the member from the Official Opposition.

[Page 27]

MR. STEELE: Mr. Chairman, I was really hoping that we could get through our time here today without hearing some of the myths about Seniors' Pharmacare, and we almost made it until we got to the government members. Reading from the notes supplied to them by the government they raised this myth, which just infuriates me, about the 50/50 cost sharing, because the implication of that is that seniors should be grateful that they're only paying around 30 per cent because the program is supposed to be 50/50. It never was 50/50 - it's a mirage; it's a phantom; it's a crock. The original program had seniors paying 20 per cent and their share has been going up and up and up every year, and it's not as if seniors are supposed to be grateful for that because the government every year has been putting more and more and more of a burden on them.

One of the other myths is about the cost of the program, and Ms. Hubbard cited the cost of the program, but of course that's the total cost of the program including the share paid out of pocket by seniors. So out of the figure cited by Ms. Hubbard the total cost to the government is quite a bit less than that. I don't know anywhere else in government - I'm not talking about Ms. Hubbard here, I'm talking about the elected people - where they routinely cite a figure about the cost of a program that includes the revenue to the government paid out of pocket. We just don't do that anywhere else, but it's something that government does. The Liberals did it when they were in, and now the Conservatives are doing it - and let's not forget the Liberals were the ones who promised . . .

MR. CHAIRMAN: Order, please. Let's have some order, please.

MR. STEELE: Let's not forget the Liberals were the ones who, in 1998, promised to eliminate the premium. Well we know what happened to that, but the total share of the program being paid for by the government is going down - let's not overlook that fact - and the total share being paid by seniors is going up.

The third myth - well, it's not a myth because it's true - but the third line the government tries is, what are you worried about? It's better than New Brunswick. If the Conservatives want to run the next election on the slogan, it would be worse if you lived in New Brunswick, let them try. Our seniors have a certain expectation about what the Seniors' Pharmacare Program ought to look like here in Nova Scotia. Let me tell you, they're not very happy. I can't imagine that the seniors living in their constituency are any happier than the seniors who live in my constituency.

Mr. Chairman, let me go back, briefly, to this issue of Aricept, which I want to explore just a little bit further. I understand, Dr. Ward, what you're saying about what it is that you're waiting for. That would all make sense except for one thing, five other provinces - Quebec, Ontario, Manitoba, Saskatchewan and Alberta - have all faced the same questions and have come to the conclusion that it ought to be covered. What is it that Nova Scotia knows that those five provinces don't know?

[Page 28]

DR. WARD: We have no knowledge of the decision-making process in the five other jurisdictions as to why the choice was made to list those medications. The issue has been raised a couple of times about the opportunities for Nova Scotia. On this I would point out that this process that we're involved in as a jurisdiction, we've agreed to list Remicade, a very expensive, new anti-inflammatory medication where other provinces haven't, based on expert advice and evidence. We're waiting for that with respect to these agents.

MR. STEELE: One of the other factors here - and I guess this is the theme of what I'm saying today, Aricept is a good example of this theme today - is that the decisions seem to be made without reference to potential savings on other parts of the health care system. For those seniors for whom Aricept will work, it has the potential of keeping them out of much more expensive care options for one, two, three years, who knows. That represents a real savings to the system.

Has any study been done - not of the clinical effectiveness, Dr. Ward which, if I understand you, is what the province is really waiting for, proof of the clinical effectiveness - on the relative cost savings of a program of Aricept versus the cost to the long-term care system of not using Aricept? Has any study of that kind ever been done?

DR. WARD: Those discussions are currently underway with the expert review group. As Ms. Hubbard pointed out earlier, that group does include economists and others. Very clearly, we're trying to understand the total impact on the system. Unfortunately, the ability to track that type of information in the province at the current time is extremely limited. We're trying to gather the best evidence possible. We expect that committee to provide us with their reasonable, well-thought-out, evidence-based recommendation with respect to these medications.

MR. STEELE: Ms. Hubbard said that if Aricept were provided to the 2,000 seniors who were most likely to benefit from it, there would be a cost of $3.6 million. Is it conceivable, is it possible that not providing it is costing the province more than $3.6 million?

DR. WARD: Yes.

MR. STEELE: I would like to turn to the question of the cost of the plan's administration. We received a great deal of information, a very thick binder of information on the Seniors' Pharmacare Program. Maybe the information is there, but through this very thick binder I didn't see any reference to the cost of the administration of the program. My understanding is, and it may be incorrect, that the Seniors' Pharmacare system is administered by Blue Cross at a cost of something in the order of $13 million. Now, is it Blue Cross that's administering it, and how much is paid to Blue Cross to administer the program?

MS. HUBBARD: Atlantic Blue Cross Care processes our claims under the Pharmacare Program, as well under the physician services program they do health card

[Page 29]

registrations on our behalf, they do auditing of physicians and pharmacists and dentists, they pay claims for the dental programs, and various other programs. The total cost - it's not broken out by program - of that contract is somewhere around $8 million to $9 million.

[9:30 a.m.]

MR. STEELE: Are you talking $8 million to $9 million for Pharmacare or for absolutely everything they do for the province?

MS. HUBBARD: For absolutely everything they do. It's not broken out for Pharmacare.

MR. STEELE: Do you have any estimate of the cost of administering the Pharmacare component?

MS. HUBBARD: No, not really. I could ask staff to see if they could come up with a number, but it would just be an estimate.

MR. STEELE: How often is that contract put out to tender?

MS. HUBBARD: The contract has been with Maritime Medical Care - which is now amalgamated with Atlantic Blue Cross Care - for many years.

MR. STEELE: But the Pharmacare component wouldn't necessarily have been with them for many years, would it?

MS. HUBBARD: The Pharmacare Program has been there since 1974.

MR. STEELE: As the program changed and evolved, they have continued to change and evolve.

MS. HUBBARD: Yes. They have to meet the requirements of the program.

MR. STEELE: I guess what I'm not understanding is surely you're not suggesting that the contract hasn't been put out to tender since 1974. I'm sure that's not what you're suggesting. How often does the department look at alternative options for administration?

MS. HUBBARD: To the best of my knowledge that contract has never gone to tender.

MR. STEELE: Is that a fact, Dr. Ward, that this contract worth millions of dollars a year has never gone to tender?

[Page 30]

DR. WARD: Yes.

MR. STEELE: Why is that?

DR. WARD: At the current time we're in a discussion with Atlantic Blue Cross about redefining the contract with a view that we would potentially put it out to public tender. That's the first time that that process has been undertaken. Maritime Medical was established as an entity back in the early 1970s with some legislative activities which, in an Act passed during that time, established Maritime Medical as sort of an agency of government per se to manage those particular programs. In the course of reviewing the role of Maritime Medical and other agencies with respect to the Department of Health in the last couple of years, we have undertaken to review that contract, its terms, and to begin to determine the potential of putting it out to public tender.

MR. CHAIRMAN: It's 9:33 a.m., the next 10 minutes go to members of the Liberal caucus.

The honourable member for Lunenburg West.

MR. DONALD DOWNE: Welcome to both of you. Back to a comment that my colleague had made in reference to the board, I believe, deputy minister, you mentioned that the board did not exist past 1997. Is that accurate?

DR. WARD: That's my understanding.

MR. DOWNE: I table for the House a press release that was made June 10, 1998, where it quotes, "The board of directors of the Seniors' Pharmacare program announced in February that there would be no increase in premiums or co-pay . . ." I just want to table that. It was quoting Dr. Smith. Since 1999, has there been an increase in the co-pay, and how much?

MS. HUBBARD: The co-pay, in April 2000, went to 33 per cent, to a maximum of $350.

MR. DOWNE: The premiums, how have they been since 1999, how much have they gone up?

MS. HUBBARD: The premium was changed in April 2002 to $336.

MR. DOWNE: What is the intention of the Department of Health in regard to further increasing the cost of Pharmacare to the seniors in the Province of Nova Scotia?

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DR. WARD: At the current time the department is just beginning its budget process. No decision has been made with respect to that issue.

MR. DOWNE: The department is looking at increasing the cost of Pharmacare to seniors in the Province of Nova Scotia. You are reviewing that concept as I understand it?

DR. WARD: In the course of our budget discussions we look at all issues related to the budget.

MR. DOWNE: And part of that will be to review whether or not the Pharmacare Program should increase the premium and/or co-pay to seniors?

DR. WARD: Yes.

MR. DOWNE: The answer is yes?

DR. WARD: Yes.

MR. DOWNE: So the reality is then we could very well be looking at a higher percentage of the cost of Pharmacare being borne by seniors in the Province of Nova Scotia. I want to move back to Aricept. We have now, as I understand it, an Atlantic approach to the formulary. Is that accurate?

DR. WARD: Yes.

MR. DOWNE: What is the criteria to be able to bring a new drug under the formulary? Do you need all provinces to agree or can you do it independent of the other provinces?

MS. HUBBARD: Under the Atlantic process . . .

MR. DOWNE: Yes.

MS. HUBBARD: . . . that we currently have, the drugs are reviewed by a joint expert advisory committee with representatives from all four provinces and they review the evidence and make a recommendation back to each of the provinces. It is then up to the individual provinces whether or not they insure the medication. To date the Atlantic Common Drug Review was put in place in January of this year. They've reviewed 23 new drugs and they've recommended that 20 be insured and three not be insured. Nova Scotia has accepted those recommendations and we now insure those 20 that they've reviewed and don't insure the other three.

[Page 32]

MR. DOWNE: In their review, is cost part of the criteria for the review or is it simply or, more importantly, whether or not the drug will actually work and do the job?

MS. HUBBARD: They do look at clinical and scientific evidence for the most part, but they also look at the pharmaco-economics around the drug, the cost-effectiveness, and how it compares to other drugs or other treatments, but when it comes to the province, that is when the cost impact is done. They would need to know what the cost impact would be for the individual provinces.

MR. DOWNE: So back to my colleague's question about the $3.6 million cost for Aricept, the other costs associated in dealing with an individual with that problem, have you done the numbers to crunch the numbers to determine what cost that is to the health care system for individuals suffering from Alzheimer's or has that committee, that Maritime or Atlantic committee, have they given some ballpark ideas of the costs associated with the health care system for individuals affected by Alzheimer's or dementia?

DR. WARD: At the current time that committee is continuing to look at the process. Our presumption is that they will be doing those types of things. Very clearly, as an expert advisory committee, we tasked them to look at these things including the economics piece of it. As I have indicated earlier, one of the great challenges in this province is simply the lack of fundamental information about that particular population and those potential costs.

MR. DOWNE: The fact that there have been a number of studies and information with regard to this particular drug, Health Canada approved the drug two and a half years ago. Health Canada normally doesn't approve drugs unless they meet the criteria. The drug is not a cure and you're correct on that. It doesn't cure the problem, but what has been proven - and these are clinical studies and I'm sure you've read them, Doctor - is that 80 per cent of the patients with mild to moderate Alzheimer's who have taken Aricept either improved their mental functions or they don't get any worse. Those are clinical studies and papers that have been written. With that type of evidence, 80 per cent either don't get any worse in their condition or they get better, why would that not be evidence enough to want to move forward with providing that particular drug in the formulary?

DR. WARD: As we indicated earlier, we have asked the advisory review group to again have another look at this classification of medications. Approximately two years ago on review, the advice from that group was not to list. As you point out, there is new and growing evidence in this area. Very clearly we responded to that. We've asked that committee to go back and have another look at it.

MR. DOWNE: When did you ask the committee to review it, do you recall?

MS. HUBBARD: The issue was brought back to the Atlantic Expert Advisory Committee, I believe, in April or June, I'm not sure which meeting it was.

[Page 33]

MR. DOWNE: And how long will it take to review the new material that was made available to them two years ago?

MS. HUBBARD: They have already reviewed some of it and are waiting for the geriatric experts and clinicians to provide them with additional information around this.

MR. DOWNE: Is it possible to hide behind an Atlantic Advisory Board so you don't have to put a drug on the formulary at this point in time and maybe because of dollars you want to study it a little bit more and maybe another year you'll be able to do it. Maybe at election time you will be able to announce it or something like that. Can that conceivably be part of that or does that not enter in any way, shape or form the process of trying to get a drug on the formulary?

MS. HUBBARD: That does not enter that expert advisory process. They have no link.

MR. DOWNE: How much involvement would the minister have in regard to directing those decisions?

MS. HUBBARD: None, absolutely none.

MR. DOWNE: So all directions would come from the deputy minister?

MS. HUBBARD: No.

MR. DOWNE: All come from your side of the department?

MS. HUBBARD: We allow the Expert Advisory Committee to function under their terms of reference which are set out for them and doesn't involve any staff other than for support.

MR. DOWNE: But you would need to . . .

MR. CHAIRMAN: Excuse me, Mr. Downe, I have a point of order which I would like to recognize.

MR. JAMES DEWOLFE: On a point of order, Mr. Chairman, the member is clearly moving away from the mandate of the standing committee to look at and determine value for dollar for government programs. I would ask you to keep an eye on the situation, please.

MR. CHAIRMAN: I have an ear on the situation and I don't want to take away from Mr. Downe's time. I think it's a dispute between two members. You have 40 seconds remaining. I'm adding that on, Mr. Downe, so if you could proceed to your next question, please.

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MR. DOWNE: The issue is when you want to trigger a study, you need to request that study to be done, I take it?

MS. HUBBARD: No.

MR. DOWNE: Okay, they do it all independent?

MS. HUBBARD: They review drugs as they are submitted by manufacturers and if something has to be re-reviewed, they keep an eye on that through the normal course of their proceedings.

MR. DOWNE: Well, thank you very much and it sounds like it's working in a reasonable fashion, certainly, if 23 drugs were brought in and 20 are being accepted and the work has been done, and I appreciate the professionalism of that group. I want to clarify that in 1990 the Progressive Conservative Government promised that they would eliminate premiums. They have since . . .

MR. CHAIRMAN: Thank you for your time, Mr. Downe. It's now 9:44 a.m. and the next 10 minutes go to the members of the government caucus. The MLA for Kings West has the floor.

MR. CAREY: Mr. Chairman, we do have several questions and not much time so just to clarify, I don't think there is anyone in Nova Scotia who wouldn't say that we should provide the needed medications for seniors and everyone else if it was possible, but this committee, in my understanding, is to determine and monitor that taxpayers are getting good value for their money. From what I'm hearing it would appear to me that seniors are getting good value for their money and so I mean I think it's irresponsible for anyone to think that government can take on all payments for all things for all citizens. That just bothers me when that comes up so often. However, getting to the drug situation, how many companies actually are there that do R and D now approximately? Is there a large number or a small number of drug companies?

DR. WARD: At the current time there are 63 members of the Pharmaceutical Manufacturing Association in Canada. I guess I would define the varying levels of developmental and research piece of it to say simply that a number of those are generic. In other words, when a drug comes off patent, they take that compound and begin to manufacture some of it for themselves. Much of the primary bench development and research does not occur in North America. A surprisingly small percentage of manufacturing occurs in North America. At the current time, about 80 per cent of the bio-active compounds or pharmaceuticals used throughout the world are manufactured in Europe and the European union. Many of those medications are shipped over to North America in bulk. The manufacturing industry in North America, for those, is really putting them into pills or putting them into solutions.

[Page 35]

[9:45 a.m.]

If I could just add one other comment that was raised earlier by one of the other members, it was the issue of Health Canada approving drugs. Health Canada is a regulator, and the only thing Health Canada does is make an assumption about whether or not a drug is safe or not safe. I would point out that in the last year, Health Canada approved over 100 different medications of which one was a new type or class of drug. The other 100, in fact, were basically similar compounds to those previously on the market. Many of the reviews and requests being brought forward to our own review committee and others are not for a new class of medication, but in fact are for the listing of a drug that is already similar to one that is on.

The challenge for the committee and the expert committee is to make some evaluations: is there scientific evidence that those drugs, in fact, are more effective. Then again we get into the cost-benefit issues; if they're not, is there a drug with similar actions that is less expensive? Those are some of the issues that roll around in that particular committee.

MR. CAREY: My understanding is that drug companies, of course, spend a lot of money developing a product, but once they do that they certainly have long-term patents on these, sometimes 18 to 20 years. Is that correct?

DR. WARD: Yes, in Canada.

MR. CAREY: These companies are really, as you pointed out in your introduction, being very responsive to their shareholders, and actually providing the drug to citizens is like any good business, they're interested in their shareholder and they're not quite as interested in making sure every Canadian has access to these things. We can't blame them for that, being a business. I guess my question would be, and this is probably a little simplistic, what rule does the Formulary Management Committee and the Drug Evaluation Alliance of Nova Scotia play in addressing rising costs? To make it simple, do you have any ability to negotiate price?

MS. HUBBARD: I guess the first thing I would like to point out is Nova Scotia is a fairly small player in the pharmaceutical market. Even though we spend a lot of money on drugs, we still have minimal influence on how the prices are set. Nova Scotia is approximately 2 per cent of the Canadian market, and Canada is approximately 2 per cent of the world market for these manufacturers' drugs. Very often we try to negotiate with them on drug prices, and they very often come back and say that their drug prices are set by their parent company which is not in Canada. The international market is at play there.

Trying to manage the costs of medications, the Formulary Management Committee, as has already been talked about today, gives us their expert advice around the evidence of drugs. They provide us with recommendations on the studies. There are real-life situations

[Page 36]

there, because there are practising clinicians, physicians, general practitioners, specialists, and pharmacists, so they take into consideration real-life situations. The Drug Evaluation Alliance looks at critical care, drug care issues, and tries to develop interventions to improve drug therapy.

Just one other comment about prices. We do, through our hospitals in Nova Scotia, actually do tendering for all our drugs and we buy for the whole province for our hospitals, which is the one place that the manufacturers will provide some discounts on their drugs. We're the only province in Canada at this time that buys province-wide.

MR. CAREY: Thank you. I will pass to my colleague, Mr. Taylor.

MR. CHAIRMAN: The member for Colchester-Musquodoboit Valley, you have three minutes.

MR. BROOKE TAYLOR: Mr. Chairman, I would like to begin by thanking our witnesses this morning for their patience - no pun intended. I'd also like to say how pleased we are at the constituency level in Colchester-Musquodoboit Valley - and I speak of the constituency office and staff - with the Pharmacare staff. From time to time on an infrequent basis we have to communicate with the Pharmacare staff on behalf of a constituent, usually a senior, and I have to say that the staff is always very forthright, polite, courteous and as you know, Mr. Chairman, I'm not one to extend bouquets, but I really do have to say that we are very pleased with the Pharmacare staff and I want that put on the record.

MR. CHAIRMAN: And it's noted.

MR. TAYLOR: Thank you. Much has been made of the Romanow final report and I know your department, Mr. Deputy Minister, and your minister made a presentation before the commission. I'm also aware of the Kirby report and I know you referenced that a little bit earlier and I guess probably Nova Scotians and perhaps even Canadians might be having some difficulty discerning the pros and cons of the various reports that are out there. I just wondered, Deputy Minister Ward, what your thoughts are around where you think, in this case the Romanow Report, may go in the area of pharmaceutical management.

[Page 37]

DR. WARD: My best sense, having read most of the Romanow Commission papers and participating in a number of discussions, I think Mr. Romanow is going to be very clear. He will be challenging the federal government to renew its partnership with Canadians and come back to the table as a full partner in the provision of medical services in the country, particularly in the area of sustainable funding. My belief is with respect to the pharmaceuticals issue, he will come back and talk about the need for a national Pharmacare Program probably based on catastrophic costs to provinces. I think he will also be asking provinces and the federal government to participate in a greater way through a national review process around the evaluation and listing of medications. I think he will be talking about fast-tracking the generics issue. I do believe he will be talking about other opportunities to look at medications and their use and costs across the country.

I think very clearly one of the challenges that Mr. Romanow will address is the growing recognition that pharmaceuticals are becoming a daily part of living for many seniors. Attendant with that are significant risks in terms of inappropriate or unwarranted or unexpected complications as a result of the use of medications, either underuse or overuse, and the subsequent hospitalization of a great number of seniors. At the current time the general sense is approximately 15 to 20 per cent of hospital admissions in Canada relate to the results of pharmaceuticals and their use in some way - whether it's inappropriate dose, overdosing or wrong medications.

Very clearly there are significant opportunities for us to improve the use of medications within our publicly funded system. We would like to believe that as we become more knowledgeable that in fact we can meet the challenge of providing the right medications to the right person at the right place with the right result.

MR. CHAIRMAN: I'm going to allow the member who specializes in bouquets lately - although I know he has a whole pile of bricks with him most days - to make an introduction.

MR. TAYLOR: Thank you, Mr. Chairman. Earlier on I referenced the fact that at the constituency office we are quite busy, as I'm sure all MLAs are, regarding seniors issues and things of that nature. My constituency assistant, Sherri Richard, is here with three young men who are engaging in the Take Your Kid to Work Day. You might know, Mr. Chairman, that since 1994 some 1.3 million students across Canada have participated in the Take Your Kid to Work Day and over 70,000 places in Canada have supported the students. To get to the introduction, these students and their chaperone, Ms. Richard, have a very ambitious schedule today. I trust the information I have is correct - these are students at Bible Hill Junior High and the students would be Mike Currie, Stephen Morrell and Josh Richard. I wonder if I could ask the students to stand and receive polite applause from members of the Public Accounts Committee this morning. (Applause)

MR. CHAIRMAN: Great. Welcome.

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MR. TAYLOR: Thank you for your indulgence.

MR. CHAIRMAN: And for Mr. Taylor's CA, I've heard you're a saint - good work. Dr. Ward and Ms. Hubbard, I'm going to ask you just for a couple of quick comments for wrap-up.

DR. WARD: Mr. Chairman, I think the only comment we would like to make is that the department has recognized the challenge of managing the entire issue of pharmaceuticals, particularly in the publicly funded system. Over the last couple of years the department has made some remarkable strides, particularly in the area of academic detailing and our move towards an Atlantic Canada review process has been looked at with envy across the country. I think it's important to note that the new national, the Canadian expert review advisory board for pharmaceuticals that is currently in development is, in fact, being patterned on the program we've put together in Atlantic Canada. We will continue to be challenged to manage this program, but we are beginning to feel comfortable and in fact are beginning to get our hands around it.

MR. CHAIRMAN: Thank you. Just before I call for adjournment, I have a couple of quick orders, if you could just remain in your place so we can pay our respects. Next week we will be in camera and I note - the teacher in me can't resist - you have homework. We will be approving this. I also have one other order of business, the member for Cape Breton West on a point of order.

MR. MACKINNON: Thank you, Mr. Chairman. With regard to the request for information from the Department of Health that was requested by our clerk, I notice the information that's been sent over by the Department of Health is, at best - and I'm being generous - two years obsolete. I'm just curious as to why the Department of Health continues to send obsolete information when there's more current information. I think it smacks of disrespect for this committee and for all members and their ability to be able to deal with the issues that come before this committee. I think it's something that we should deal with because it's not the first time it's happened with this particular department.

MR. CHAIRMAN: On that point of order, I will take it under advisement and consult with the Speaker and report back at our in camera meeting on this topic. Would that be appropriate?

MR. MACKINNON: That's fine.

MR. CHAIRMAN: Thank you. I would call for adjournment.

MR. MACKINNON: I move to adjourn.

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MR. CHAIRMAN: So moved. Thank you.

[The committee adjourned at 10:00 a.m.]